This episode explores the current state and future trajectory of the spirits industry, featuring an interview with Debra Crew, CEO of Diageo, by Nicolai Tangen, CEO of the Norwegian Sovereign Wealth Fund. Against the backdrop of economic challenges and inflation impacting consumer spending, Crew highlights the industry's resilience and long-term growth potential, emphasizing that alcohol constitutes a small percentage of discretionary spending. More significantly, the discussion delves into generational drinking habits, revealing that while Gen Z expresses a preference for moderation, their actual behavior shows a pattern of "zebra striping"—alternating between alcoholic and non-alcoholic versions of the same drink. For instance, Crew cites the example of a consumer ordering a Guinness followed by a Guinness 00. As the discussion pivoted to Diageo's business strategy, Crew details the company's approach to brand acquisition and building, citing the Casamigos tequila acquisition as a successful example and the recent acquisition of Ritual in the US to expand into the non-alcoholic spirits market. Finally, Crew offers insights into Diageo's corporate culture, emphasizing collaboration and a shift from a "be the best" to a "be better" value system to foster agility and innovation. This reflects emerging industry patterns of adapting to changing consumer preferences and embracing experimentation.
